Oil prices are jumping on President Trump’s news that the Saudis and Russians are ending their feud and will cut oil production by 10 million barrels. Oil rallied over 30% after Saudi Arabia issued a statement calling for an urgent OPEC+ meeting and that they want to restore balance to the oil market.
Oil pulled back from the highs after Kremlin spokesperson Peskov said that President Putin has not spoken to the Crown Prince.
All the fine details seem to still be up in the air so President Trump’s tweet might have been premature. Oil is a tangible asset and with global storage tanks nearing capacity, production cuts were going to happen regardless of an agreement being reached by the the top three energy oil producers. It should also be expected that the US will contribute to production, even though no details were mentioned.
An oil production cut agreement is likely to be reached quickly, but that might only provide a limited rally as demand devastation will not see any signs of relief for at least a couple more months. WTI crude will likely see sellers defend the $30 a barrel.
FX
The Canadian dollar, Norwegian krone and Russian ruble are all rallying strongly following the sharp rise in oil prices. These oil-export driven economies will breathe a sigh of relief that a key bottom has been made for oil prices.
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.
Ed Moya
His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.
Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.
Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.
Ed holds a BA in Economics from Rutgers University.
Latest posts by Ed Moya (see all)
- Market Insights Podcast – Powell struggles to deliver a hawkish hold - 1 November 2023
- Fed React: USD/JPY softer after Fed fails to deliver hawkish hold - 1 November 2023
- EUR/USD: Dollar wavers on slower pace of Treasury Refunding Sales and mixed labor data - 1 November 2023